The first pillar of the old-age pension is the AHV. It operates according to the pay-as-you-go principle, in which the working generation pays for the pensions of retired people. There is a second pillar, the occupational pension, to top up the state old age pension. It works according to the principle of saving for one’s retirement (Vorsorgesparen). You pay in contributions and when you retire you receive a pension that is determined by the contributions you have paid.

The many different pension funds and insurance companies organise occupational pensions. As with AHV, it is compulsory for all employed workers to be insured with a pension fund. There are exceptions, such as if you earn less than CHF 21,150 per year (as of January 2016). An occupational pension is not obligatory for self-employed people, but you can contribute to a pension fund if you wish. In many cases industry associations organise an occupational pension fund for the self-employed.

Your pension fund will provide you with an annual statement which, amongst other things, will show how much money you have already saved and the pension this money will provide you. Under certain conditions you can have all the money you have saved paid out to you, such as if you leave Switzerland forever, or start up your own company. You should seek expert advice, however, before taking such a step.